E.On Ruhrgas AG chief executive officer Bernhard Reutersberg said Wednesday the company is seeking to secure natural gas from the Persian Gulf region and Africa to diversify its supply base and make up for dwindling European production of the fuel.
E.On Ruhrgas AG chief executive officer Bernhard Reutersberg said
Wednesday the company is seeking to secure natural gas from the Persian Gulf
region and Africa to diversify its supply base and make up for dwindling
European production of the fuel.
"We would like to open up to the global market of LNG [liquefied natural
gas]," Reutersberg told Zawya Dow Jones in an interview Wednesday.
"Norway and Russia can increase their production rate but at the end of
the day we would depend more and more on just two countries and that would not
be our strategy," he said, speaking in Qatar's capital, Doha.
E.On Ruhrgas, the natural gas unit of German utility E.ON AG (EOAN.XE), is one
of
Europe
's largest gas suppliers. The firm is embarking on
an aggressive diversification strategy of its supply portfolio as production of
natural gas plummets in countries like
Germany
and
the
U.K.
The company presently sources about half its gas supplies from
Russia
and
Norway
. Much
of its future supplies are expected to come from the import of LNG, gas cooled
so it becomes liquid and can be transported over long distances on special
vessels.
Reutersberg played down concerns over
Europe
's
heavy reliance on gas from
Russia
,
which has the largest natural gas reserves in the world and from where E.On
Ruhrgas sources some 26% of its gas supplies.
"The Russians are also dependent on us [
Europe
]
because they need the demand and they cannot afford to give it up," he
said.
Essen-based E.On Ruhrgas aims to obtain up to 10 billion cubic meters of gas
from its own sources by tapping LNG markets in countries such as
Qatar
and
Algeria
,
where it started drilling last year, Reutersberg said.
Qatar
holds
the third-largest gas reserves in the world and is the top global LNG exporter
with total capacity to hit more than 77 million tons a year by the end of 2010.
Algeria
has
the second-largest gas reserves in
Africa
after
Nigeria
.
Earlier Wednesday, Reutersberg said his company started talks six months ago
with Qatar's state-controlled LNG producing firms Qatargas Operating Co. Ltd.
and Ras Laffan Liquefied Natural Gas Co. Ltd., better known as RasGas, to
supply the super cooled fuel to Europe.
"Qatari companies are interested in a stronger footprint in
Europe
--there
are opportunities on both sides," he said.
As well as
Algeria
,
Reutersberg said E.On Ruhrgas was exploring a potential project in
Equatorial
Guinea
in sub-Saharan
West
Africa
.
"It's a long way to go before entering into a final investment decision
there," he added.
E.On last had talks with
Iran
over
gas supplies in 2009, Reutersberg said, adding that it remained an attractive
market but political instability was preventing further negotiations.
Iran
holds
the world's second-largest natural gas reserves.
Reutersberg said his company's decision--announced earlier this month--to take
a 15% stake in the Trans Adriatic Pipeline, or TAP, project to bring gas from
the Caspian to
Europe
would not dent E.On's
interest in the
Persian Gulf
region.
"We are interested to acquire some volumes in the Caspian and we will
bring this gas specifically to
Italy
. Therefore
we need access to different market places," he added.
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